Sunday, July 13, 2008

The Las Vegas Valley is a hotbed of entrepreneurial activity, with a near-constant stream of accolades anointing it one of the nation's best markets for startup businesses.

And a fair number of businesspeople flocking to the city for new opportunities are minorities.

Experts say boosting opportunities for minority business owners bolsters the local economy because many minority entrepreneurs run the kinds of smaller companies that create most of Nevada's jobs.

What's more, supporting local companies keeps money in the local economy, as smaller businesses based here fill needs that out-of-state corporations might otherwise take over, said Carlos Gomez, business development director at the Latin Chamber of Commerce. Helping minority businesses find success also expands the supply for goods and services, thus improving competition and reducing costs, according to the Nevada Minority Business Council. And the gains in jobs and tax revenue limit the need for social-service programs, the council added.

Thanks in part to MGM Mirage's emphasis on diversifying its vendor base to include more minorities, businesses across the city show greater interest in reaching out to minority entrepreneurs, Gomez said.

"MGM Mirage is pushing the envelope to get minorities involved, and we see more companies that are more open to working with minority-owned businesses," Gomez said. "There are more opportunities."

Some of the city's larger businesses also set aside specific percentages of vendor work just for minorities, and that helps minority providers win contracts. It can be easier to snag a contract when you're not competing with bigger, more-established companies, Gomez said.

Nordstrom, for instance, recently conducted a project preview event to help local minority construction companies learn about the company's bidding process.

Vida Chan Lin, vice president of the Asian Chamber of Commerce, agreed that minority owners of businesses in Las Vegas have many chances to leave their mark.

"There are more minorities in Nevada now, and I think there is opportunity for everyone," she said. "If you can figure out where you belong, the opportunity here is great."

Minority entrepreneurs in Nevada still face obstacles, though.

Tops among those issues is financing. Many ethnic business owners are first- or second-generation Americans, and they often lack the extensive credit histories that more-established residents claim, Gomez said. The shortage of credit experience makes obtaining business loans tougher, and it can also curb access to insurance, bonding and other operational essentials.

For Phung Jefferson, a Las Vegas attorney and owner of Law Offices of Phung Jefferson, financing proved the biggest stumbling block to opening her firm in 2003.

"I think, as a minority, I wasn't afforded the same access to financing that nonminorities had," Jefferson said. "I don't want to say, 'It was because I'm black.' I'm sure there were other factors. But with the bigger institutions, I wasn't able to qualify. The avenues available to me weren't as open as those for nonminorities."

Communication hurdles block the way for some companies as well, Lin said, as many first-generation minority entrepreneurs speak English only as a second language. Las Vegas also lacks the communications infrastructure of bigger cities on the coasts, where established Asian-language radio and television stations help connect business owners to the consumers who need their goods and services.

Competing for labor with megaresort operators challenges Asian business owners in particular, Lin added, because hotel-casinos experience high demand for employees who can communicate with visitors who speak Chinese, Japanese and Korean.

For other minority entrepreneurs, harmful stereotypes linger.

"There are segments of society that render me at a disadvantage just because of the way I look," said Lonnie Wright, the black owner of Shetakis Wholesalers, a food distributor that posts more than $70 million a year in sales serving local hotel-casinos and the Clark County School District. "It doesn't happen all the time, but sometimes. African-American males have been somewhat of a poster child for ill will in our society. So when you're out there, even if you're educated, you still run up against people being a product of their environment. But you need to learn to navigate past that, and you have to develop tolerance so you don't have a chip on your shoulder. Excuses will not cause you to be successful."

And those major corporate diversity initiatives don't always pay dividends for smaller minority enterprises, added Cedric Crear, president of Crear Creative Group and a member of the Board of Regents for the Nevada System of Higher Education. That's because many companies with diversity programs often fulfill contract objectives by giving one or two larger minority operations big contracts, frequently in construction.

"If you dive down into it, is it one minority-owned company getting a $4 million contract or 10 different companies getting pieces of a bigger $4 million contract?" Crear said. "It's a quicker, larger chunk that can be bitten off at one time. It's easy to say, 'Hey, we gave out $50 million in contracts,' but it was for three construction companies. There are other companies besides construction."

Minority entrepreneurs also have "huge challenges" in networking, and in grappling with the "unfounded perception" that they can't provide the services bigger businesses seek, Crear added.

Jefferson agreed that minorities struggle with networking and access to major local corporations.

"It's about the circles you travel in," she said. "Minorities aren't always traveling in the same circles as nonminorities, so we have less exposure to bigger companies. In this town, it's about who you know, not what you know. If you know the right people in the right circles, you have access to people who make decisions. If you're not in those circles, you don't have access. You're out there pounding the pavement and knocking on doors."

To succeed despite hurdles, Crear recommended that minorities considering launching a business work toward solid credit histories to help secure financing. They should also be willing to put their own money into their startup. He urged entrepreneur hopefuls to stay positive and keep trying: When one bank Crear had connections with turned down his application for an SBA loan, he took his business plan to a second lender who guided him through the process and loaned the funds.

Jefferson suggested looking outside traditional banks for business loans. She found her financing through the Nevada Microenterprise Initiative, a program that helps small startups launch. The group's $10,000 loan to Jefferson made the opening of her practice possible.

Minority business owners must make sure they don't give bigger companies an excuse to avoid working with them, Crear said. His business, for example, is licensed to operate in states including New Jersey, Arizona and North Carolina, so no prospective client could deny him a contract based on limited market reach.

Jefferson also recommended minority hopefuls finding a mentor who successfully started his own company, and tap him for advice on getting going.

Observers said they have high hopes for the future of minority business ownership.

The younger generation "is not being indoctrinated and programmed with the types of prejudices and stereotypes my (baby boom) generation grew up with," Wright noted.

Also, Lin said, young minorities have a distinct advantage their more-seasoned counterparts sometimes lack: technological savvy. That enables them to use computers and the Internet to conduct more advanced research, develop extensive business plans and tap into greater resources for financing and networking.

Regardless of minority status, though, the secret to doing well is still the same for any business, Gomez said: "Like any type of reward, success comes from education and vision, plus hard work, hard work and hard work."